Cebu Air net income soars 154%

MANILA, Philippines - Gokongwei-controlled Cebu Air (CEB) posted a 153.8-percent growth in its net income for the first nine months of 2010 to P4.83 billion from P1.9 billion in the same period last year.

Total revenues rose 30.8 percent for the January-September 2010 period to P21.5 billion from P16.46 billion last year. Passenger revenues increased by 33.2 percent to P18.35 billion from P13.78 billion, primarily due to the 19.6-percent increase in passenger volume to 7.7 million as of end-September this year from 6.4 million in the same period last year.

For the third quarter, CEB posted a complete turnaround, from a P222-million loss to a P1.67-million net income. Revenues for the July to September 2010 period were up, to P6.6 billion from P4.9 billion last year, with passenger revenues growing 82.6 percent to P5.47 billion and cargo revenues 8.2 percent to P540 million.

CEB president and CEO Lance Gokongwei said the company’s revenue growth outpaced its passenger growth due to strong demand, resulting in higher load factors and improved margins. “We have consistently maintained a competitive cost structure which allows us to offer lower fares while remaining profitable,” he said, adding that they expect revenues for the whole of 2010 to grow by more than 30 percent, sustaining the growth for the first nine months of the year.

The company said that aside from accelerating aircraft deliveries given strong forward bookings, it is also looking forward to accelerating development of ancillary revenues, a stronger peso offsetting rising fuel prices, lower unit cost with the acquisition of additional A320 aircraft and higher frequencies, and continuing to dominate the domestic market and growing its international market.

The airline carried a total of 7.72 million passengers between Jan. and Sept. this year. With 6.10 million domestic and 1.62 million international passengers carried, officials said they are on track to carrying more than 10 million passengers in 2010. And of total passenger revenues, 62 percent came from domestic operations and 38 percent from international.

Total passenger traffic was up 20 percent in the third quarter and for the whole nine month period, driven largely by international passenger volume.

Gokongwei noted that with a load factor of 85 percent in the third quarter of 2010, they are confidently adding international frequencies to meet demand.

“The success of our initial public offering has further strengthened our balance sheet, and we are well positioned to support our business growth. The operational and financial results confirm that CEB ranks with the very best low cost carriers in the world,” he added.